Paul Jacob

Can you name five formerly poor countries that have grown rich through wealth transfers from more economically advanced nations?

No? Okay, then just name one.

Still stumped? As you probably suspect, not a single nation has ever grown wealthy by way of financial handouts from other, more well-to-do societies. That's worth remembering when we consider how best to pull people out of poverty.

Last week, the United Nations issued a report on its Millennium Development Goals (or MDGs, for short). One important goal is to "eradicate extreme poverty and hunger," with a chief target being to cut in half the proportion of the world's people whose income is less than $1.25 a day by 2015.

According to an article in the Vancouver Sun, The Millennium Development Goals Report 2011 "grudgingly admits" that "wealth creation and not wealth redistribution is the main driver behind reduced levels of extreme poverty around the world." Seems most of this very welcome decline has occurred in East Asia (mainly China) and in India -- areas benefitting not from foreign aid but from massive economic growth.

The findings released by the UN's Economic and Social Affairs Department show that the percentage of Chinese citizens living on $1.25 a day or less has already been reduced by more than half -- from 60 percent to just 16 percent. The report goes on to state, "The fastest growth and sharpest reductions in poverty continue to be found in Eastern Asia, particularly in China, where the poverty rate is expected to fall to under five per cent by 2015."

India's economic expansion has also had a major impact on alleviating world levels for poverty and hunger. "In that country," the document says, "poverty rates are projected to fall from 51 per cent in 1990 to about 22 per cent in 2015."

On the other hand, sub-Saharan Africa receives the largest amount of the world's overseas development aid, per capita, yet those living there in extreme poverty dropped only modestly between 1990 and 2005, from 58 percent to 51 percent.

But to Ban Ki-moon, the UN's Secretary-General, the success of homegrown economic growth means simply that, "Already, the MDGs have helped lift millions out of poverty." Shazam!

And what to make of the lackluster track record of development aid?


Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.